If an Import-Competing Firm Is Imperfectly Competitive,than Under Free Trade

question 7

Multiple Choice

If an import-competing firm is imperfectly competitive,than under free trade an import quota will ________ domestic market price,________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

• A) increase; increase; decrease; have no effect on; decrease
• B) decrease; decrease; increase; decrease; have no effect on
• C) increase; have no effect on; decrease; increase; decrease
• D) decrease; increase; decrease; increase; decrease
• E) have no effect on; have no effect on; decrease; increase; decrease

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Definitions:

Private Ownership

Private ownership denotes the legal right of individuals or entities to own property or businesses, as opposed to ownership by the government or public bodies.

Public Ownership

The state or condition where assets are owned by the government or a public entity, rather than by private individuals or companies.

Antitrust Laws

Legislation enacted to prevent new monopolies from forming and police those that already exist to protect consumers from predatory business practices.

Fair Return Price

A pricing concept where the price of a good or service is set to allow the provider to cover costs and earn a reasonable profit, often associated with regulated industries.